Judge Linda S. Marks, Case 2022-01246058 2023-07-31 Tentative Ruling

Judge: Linda S. Marks, Case: 2022-01246058, Date: 2023-07-31 Tentative Ruling

1. Motion for Attorney Fees filed by Jodi Chadbourne, Coleen High and Timothy Hartnett on 3/24/23
2. Motion for Receiver Final Accounting filed by David M. Goodrich on 3/24/23

Motion #1:

Plaintiffs Jodi Chadbourne, Colleen High, and Timothy Hartnett (“Plaintiffs”) move for an award and reapportionment of Plaintiffs’ attorney’s fees and costs incurred in this action based on the grounds that Defendant Mary Kathrine Hartnett’s (“Defendant”) inequitable actions forced Plaintiffs to incur unnecessary attorney’s fees that could have been entirely avoided. Referee David M. Goodrich (“Referee”) moves for an order approving the Referee’s Final Report, approving the fees and costs of the Referee, authorizing the Referee to distribute funds, authorizing the Referee to execute any and all documents necessary to close all bank accounts and issue 1099s, relieving the Referee of any further duties and obligations upon distribution of all proceeds, and authorizing the Referee to exonerate/cancel the bond posted for the sale.

Code of Civil Procedure section 874.040 provides: “Except as otherwise provided in this article, the court shall apportion the costs of partition among the parties in proportion to their interests or make such other apportionment as may be equitable.”

“There is no ambiguity in the language of section 874.040. It simply states that the trial court must apportion the costs incurred in a partition action based upon either the parties’ interests in the property, or equitable considerations.” (Lin v. Jeng (2012) 203 Cal.App.4th 1008, 1025, emphasis in original.)

The costs of partition expressly include reasonable attorney’s fees incurred or paid by a party for the common benefit and the fee and expenses of the referee. (Code Civ. Proc., § 874.010.) “Whether the services are for the common benefit must be decided upon the facts and circumstances in each particular case.” (Stewart v. Abernathy (1944) 62 Cal.App.2d 429, 433.) “[T]he purpose of the statute is to divide the cost of the legal services among the parties benefitted by the result of the proceeding.” (Ibid.)

Equitable apportionment should be the exception rather than the rule. (Finney v. Gomez (2003) 111 Cal.App.4th 527, 546.) Costs of partition should normally be apportioned in proportion to the interests of the parties but may be equitably apportioned where litigation for the common benefit arises among only some of the parties, or where the interest of the parties are not identical. (See id. at pp. 546-548.)

Neither of the two instances which call for equitable apportionment are found here. This litigation has not arisen among only some of the parties interested in the property; all those who had an ownership interest in the property are named parties. Further, the interests of the parties are identical. Each Plaintiff and Defendant owned an undivided 25% interest in the property prior to its sale. Thus, the Court finds that the attorney’s fees and costs should be apportioned among the parties equally.

The Court finds the number of hours expended to be reasonable. Plaintiffs’ counsel has spent more than 95.3 hours prosecuting this partition action. (Declaration of Paul A. Hoffman, ¶ 12.) The attorneys who performed work in this action have billing rates of $395 and $300 pr hour. (Id. ¶ 6.) Before filing this lawsuit, Plaintiffs’ counsel sent a letter to Defendant to request that she agree to sell the subject property to avoid the filing of this lawsuit. (Id. ¶ 2.) Defendant failed to sign or return the proposed agreement. (Ibid.) After this lawsuit was filed, Defendant failed to respond or answer, which led to the entry of default. (Id. ¶ 4.)

The Court further finds the billing rates and total amount of fees to be reasonable. (See Hoffman Decl., Ex. 6 [billing records].)

Tentative Ruling: Plaintiff’s Motion for an award of $39,513.30 in attorney’s fees and costs is GRANTED. However, the request that the total of attorney’s fees and costs be apportioned to Defendant only is DENIED. The attorney’s fees and costs shall be apportioned equally among the parties.

Motion #2

Receivers must prepare, serve and file (by noticed motion or stipulation of all parties) a “final account and report, a request for discharge, and a request for exoneration of the receiver’s surety.” (Cal. Rules of Court, Rule 3.1184(a).) If the report seeks allowance for compensation to the receiver or attorneys for the receiver, it must state in detail what services were rendered and whether previous allowances have been made. (Id., Rule 3.1184(d).)

Upon approval of the receiver’s report and accounting, the receiver is normally discharged, and the bond exonerated. The order discharging the receiver and settling the account is res judicata as to all claims against the receiver. (Aviation Brake Systems, Ltd. v. Voorhis (1982) 133 Cal.App.3d 230, 234.)

Here, the Court finds that the Referee has complied with the requirements for filing and serving a final account and report, request for discharge, and request for exoneration of surety. The Referee has incurred a total of $14,944.14 in fees and costs in this action. (Declaration of David M. Goodrich, ¶ 15, Ex. 11.) The property at issue in this matter has been sold and the Referee has received net sale proceeds of $2,326,550.80. (Id. ¶ 9.)

As discussed above, the costs of partition which may be apportioned among the parties expressly include the fee and expenses of the referee. (Code Civ. Proc., § 874.010.) As with the attorney’s fees and costs, the Court finds no reason why the fees and expenses of the Referee should not be apportioned equally among the parties.

Tentative Ruling: The Referee’s Motion is GRANTED with an order that the Referee’s fees and expenses be equally apportioned among Plaintiffs and Defendants.

Plaintiffs to give notice